Iain Watson
Political correspondent
The Foreign Office is reviewing a pay-off received by Lord Mandelson after he was sacked as the UK’s ambassador to the US, BBC sources say.
The review follows the release of fresh details about the peer’s contacts with Jeffrey Epstein and the start of a separate police inquiry in the UK. Lord Mandelson is believed to have received up to £40,000 after his dismissal in September over links to the late convicted sex offender.
On Friday, police searched two homes linked to Lord Mandelson after newly released US files indicated email exchanges with Epstein about fiscal policy. He has not been arrested.
Government sources confirmed the Foreign Office reached a financial settlement with Lord Mandelson but would not disclose the sum. The Times reported the exit payment was equivalent to three months’ salary. A Foreign Office spokesperson said: “Peter Mandelson’s civil service employment was terminated in accordance with legal advice and the terms and conditions of his employment. Normal civil services HR processes were followed. Further information will be provided to Parliament as part of the government response to the motion passed last week which is being co-ordinated by the cabinet office.”
The ambassadorial post typically pays £155,000-£159,999, putting a three-month payout at about £40,000.
Mandelson’s association with Epstein — and that he remained in contact after Epstein’s conviction — was known when he was appointed in December 2024. He was sacked after Downing Street said new information had emerged about the extent of the relationship, including emails showing he sent supportive messages to Epstein as he faced sex-offence charges in 2008.
The latest US government release includes exchanges from when Lord Mandelson was in Gordon Brown’s cabinet. One email suggests he gave Epstein advance notice of a €500bn EU bailout to save the euro in 2010. Another included a 2009 memo from Brown’s policy adviser Nick Butler discussing the UK’s struggling economy and recommending selling government assets to raise funds.
The Metropolitan Police is investigating allegations of misconduct in public office. Lord Mandelson has not replied to requests for comment; the BBC understands he maintains he acted lawfully and was not motivated by financial gain.
Deputy Assistant Commissioner Hayley Sewart said enquiries were ongoing, describing the probe as “complex” and requiring substantial evidence gathering and analysis, and warned it would take time and that police would not provide a running commentary.
